Insurance giant tops up its pension fund

Aviva has become the latest company to pledge a significant lump sum towards its pension fund, promising to wipe out about half of the scheme’s £1.47bn deficit.

The insurance giant’s pension deficit has risen by almost two-thirds over the past year, mainly due to the group’s acquisition of the motoring services group, RAC, which came with a £313m hole in its pension fund.

Aviva said it will pay £700m into the fund over the next two years, of which it hopes to fund about 12 per cent from its with-profits fund.

But Aviva finance director, Andrew Moss, said the group did not feel the need to substantially increase its annual contributions. He said the performance of the schemes assets would do most of the work in closing the deficit.

Speaking as the company announced its financial results, the chief executive, Richard Harvey, discounted Lord Turner’s suggestion of a government-administered National Pensions Savings Scheme.